Ex-Im Bank has got to go

Are you comfortable putting your tax dollars on the line to support foreign companies that directly compete with businesses in Texas?

Texans need to make sure their congressional representatives don’t do just that by reauthorizing the federal Export-Import Bank. Its charter is up for renewal in the coming months, which means Texans have a chance to convince their representatives that the Ex-Im Bank has got to go.

Ex-Im is as obvious an example of corporate welfare as you’ll ever see. It provides taxpayer-backed loans and insurance to foreign companies that buy American products. This helps guarantee sales for the American company selling the exports. They claim this is to promote economic growth and jobs, but in reality the bank only pads the bottom line for some of the world’s largest corporations.

In 2013, over 90 percent of its loan money benefited only five companies. In 2012, one company accounted for 80 percent. These businesses have profit margins ranging from the hundreds of millions to the tens of billions.

Unsurprisingly, the companies benefiting from the bank’s taxpayer-backed largesse desperately want to keep the cash flowing. They’re lobbying Texas’ representatives around the clock, but although some businesses in Texas benefit from Ex-Im’s taxpayer assistance, most firms are actually hurt. And for every winner the bank picks, it simultaneously picks a loser.

By helping foreign companies, the bank harms the American businesses that compete with them. That’s a frightening fact when you consider that Ex-Im sent $20 billion in taxpayer money overseas in 2014 alone.

Take the case of oil, Texas’ chief export and the lifeblood of our state. Ex-Im subsidizes a slew of foreign oil companies, including state-owned oil firms in Mexico, Saudi Arabia, Colombia and Russia. Foreign oil companies like Pemex just across the border are able to secure U.S. taxpayer-backed financing for its purchases. Texas companies don’t get the same preferential, U.S. taxpayer-backed financing.

This necessarily costs Texas businesses money. Overall, American businesses suffer cumulative losses of $2.8 billion per year thanks to the Ex-Im bank, according to research by the Mercatus Center at George Mason University.

Don’t worry, say defenders of Ex-Im, the bank still supports American jobs. But it actually has no way to measure its effect on the U.S. job market. The bank has only conducted economic impact analyses for a few of the thousands of transactions it sponsored over the last five years. The rest? Guesswork. And according to the Government Accountability Office all Ex-Im does is shift jobs around within the economy without creating any new ones.

American companies don’t just lose money when their foreign competitors get Ex-Im’s taxpayer-backed assistance — they also lose jobs. Companies from numerous industries have documented this, yet Ex-Im survives. There’s also the matter of the cost to taxpayers. Now, we’re on the hook for $112 billion. Ex-Im supporters would love to see that number rise. And as for the deficit, the Congressional Budget Office projects Ex-Im will cost us $2 billion.

Is that really the best way to spend Texas taxpayers’ hard-earned money? Of course not. That’s why it’s important that Texas’ congressmen let the Export-Import Bank expire when its charter runs out in just a few months. The bank is a clear case of corporate welfare that kills Texas jobs and penalizes Texas companies. Ending this fiasco shouldn’t be a difficult decision.